Purchasing Home

702.02

Northern Arizona University
Purchasing Policy and Procedure

Trade-ins


POLICY:

TRADE-INS

Obsolete, worn out, inactive, or uneconomical operating equipment may be traded in on the purchase of other equipment. Purchase of the equipment will follow normal purchasing procedures. Property will not be traded in if the monetary allowance offered is substantially below the known current market price or if the end result is not in the interest of the University.

Before surplus materials are disposed of by trade-in to a vendor for credit on an acquisition, the Surplus Property Coordinator or Director of Procurement shall approve such disposal. The Surplus Property Coordinator shall base this determination on whether the trade-in value is expected to exceed the value realized through the sale or other disposition of such materials.

  1. The requesting department will submit a Property Control Authorization (PCA) form for the old equipment to Property Administration (Property Administration). The PCA form will list the equipment to be traded in with full description, condition, location where it may be inspected, and property control number, the dollar amount offered for the trade-in.


  2. The PCA form will be processed through the Property Administration Office. All property identified for trade-in will be screened by Property Administration to determine title and residual rights of any external agency before trade-in may occur. After screening and approval, the PCA form will be returned to the requesting department.


  3. The requesting department will submit a requisition (RQS) for the new equipment with a description of the equipment to be traded-in and reference to the PCA form number. Send a copy of the PCA to Purchasing with reference to the RQS.


  4. The buyer will follow the normal procurement procedures. After a purchase order is issued the buyer will forward a copy of the order to Property Administration with reference to the PCA.

TRADE-IN FOR EQUIPMENT COSTING MORE THAN $50,000

If the cost of the equipment is estimated to be more than $50,000, Purchasing will request formal sealed bids. The request for quotation (RFQ) will include:

  1. A complete description of the trade-in equipment.


  2. The location where the equipment can be inspected (optional).


  3. A statement that the trade-in is "as is, where is" with no guarantee by the University as to operating condition.


  4. A request for separate quotes on the new equipment and the trade-in equipment.


  5. A statement that the University reserves the right to accept or reject the trade-in price.

If the trade-in price is accepted, award shall be based on net price after trade-in.

TRADE-IN FOR EQUIPMENT COSTING LESS THAN $50,000

If the cost of the equipment to be purchased is less than $50,000, Purchasing Services buyer may:

  1. Negotiate both the price on the equipment and a trade-in price.

    -or-


  2. Request competitive bids following the procedure outlined above.

TRADE-IN PRICE AS A DETERMINER OF BUYER ACTION

If the trade-in price received from the most responsive and responsible bidder is below known market price, the buyer will notify the requesting department. The buyer, in cooperation with the requesting department, will determine whether to accept the trade-in price as quoted or turn in the material to Surplus Property for disposal or other University use.

If the trade-in price is acceptable, the buyer will issue the purchase order. The purchase order will show the trade-in as a separate item listing the trade-in value.

EQUIPMENT TRADE-INS

Trading-in specialized and costly University property to a vendor for new equipment is often the most cost effective disposal method.

Before the trade-in, a PCA form should be completed for the item to be traded. The form should then be forwarded to Surplus Property (the property control number shall be included in order to remove this item from inventory). Surplus Property will then research the item’s value, use, etc., and verify whether a trade-in is in the best interest of the University.

After research is completed, Surplus Property will sign the PCA form approving the trade-in and send it back to the originating department. A copy of the PCA form or the PCA number should be provided to Purchasing Services at the time an order is placed for the new equipment.